Looking for ways to save on your property taxes? The New York State STAR program (School Tax Relief) grants property tax relief to qualifying homeowners. The benefit applies to school district taxes and for city taxes in New York City, Buffalo, Rochester, Yonkers and Syracuse.
There are two types of STAR programs for partial tax exemption or credit. Basic STAR is accessible to all homeowners and their spouses if they both earn less than $500,000 a year. The exemption is based on the first $30,000 of the full value of a home. The benefit is approximately a $300 tax reduction. Enhanced STAR is targeted for senior citizens (65 years and older) and their spouses with a collective income of $86,000 or less. This benefit is for the first $65,000 of the full value of a home. The benefit approximates a $600 tax reduction. For both programs, at least one owner must use the property as a primary residence.
Gov. Andrew Cuomo and the state legislature have altered the STAR program for 2016-17. A provision has been added to the New York state budget to provide new homeowners with a check for a partial amount of their school property taxes rather than a tax credit. Cuomo’s budget spokesperson, Morris Peters, assures homeowners that “[t]here is no change to the amount of the STAR credit for taxpayers, only the mechanism used to claim the credit.” Cuomo and his administration changed the system because it is expected to save New York state roughly $180 million a year. This method is meant to curb any corruption in the system with registered users receiving STAR benefits for more than one property. The money saved by the state will “pay for new spending in the state budget, such as the $1 billion income tax cut” (Joseph Spector Albany Bureau Chief).
The STAR program can be applied to condos and co-ops, which is a great way for your building to save on property taxes. For co-op shareholders, the credit normally went to the corporation and reduced maintenance fees for all shareholders by cutting the cost of the property tax payment. Due to the recent changes, shareholders who purchased their unit after August 1, 2015, will receive a direct check. However, since the co-op pays the property taxes as a whole, this amendment is not significant. Condo owners also receive a direct check. Unfortunately, properties that are eligible for the 421a taxabatement are not eligible for the STAR program.
The STAR program does not affect income taxes, but you will usually have to deduct the credit from your paid real estate taxes. In all, the changes to the STAR program will mean that co-op shareholders and condo owners will have to pay a slightly higher property tax without the automatic credit, but will receive a partial reimbursement after they made the payment. To get your savings this year, make sure your register with STAR at https://www.tax.ny.gov.